Saturday, December 27, 2003

Wednesday, December 24, 2003

Feature Article :

Year-End Trading Considerations
By Chuck LeBeau

One of the primary requirements for successful technical trading is adequate liquidity. As much as possible we need to trade in markets where the price action is orderly and the flow of orders is substantial. This requirement is true regardless of the size of our personal transactions. We want to confine our trading to active markets where large transactions by other traders do not distort prices.

Most traders assume that if they are trading small positions then market liquidity doesn't matter. They fail to understand that they need to be concerned about the orders of the large traders who may make decisions based on a variety of factors that may have nothing to do with the current price action. If we are trading a small position we don't want our stops to be triggered by a large trader who suddenly decides to enter a market order or has a large stop order triggered.

Here are specific liquidity thresholds that I have found to be helpful over the years:

1) In futures markets there should be a minimum of 20,000 contracts of open interest and at least 5,000 contracts of average daily volume.
2) In securities there should be a minimum of 500,000 shares of average daily volume.

There are also important liquidity concerns over holidays, especially the period between Christmas and New Years. For many years I had a personal rule that I would not trade futures in the period between the last Friday before Christmas and the first business day after New Year's day. Then for a two-year period this policy seemed to cost some money in missed profits so I decided to abandon the policy the following year. This decision proved to be a big mistake.

The following year was 1994 and on December 28th I was holding hundreds of profitable currency positions on the CME. Suddenly, for no obvious reason, the direction of the currencies reversed sharply and our stops were hit and my orders were filled at unbelievably bad prices. I had positions in Yen, D-Marks and Swiss Francs and all of the stops got hit at the same time and the fills were just terrible. The worst was the Yen executions. I encountered 130 points of slippage on more than two-hundred Yen contracts. When I contacted the exchange to voice my outrage I was told that due to the holiday schedule most of the usual pit traders were on vacation. I was told that there were only seven traders in the Yen pit when my stops were hit. To make matters worse, the pit traders were unable to lay off their trades in the cash market because the bank traders were also "on holiday".

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Not only was it an expensive lesson but it was particularly painful because it was a lesson I had already learned from many years of experience. I had violated one of my own rules and I paid the price. Those bad currency trades on December 28th turned a slightly profitable year into a losing year.
Another lesson to be learned from this experience is the need for consistency. If I had traded over the holidays on a consistent basis year in and year out I would have made a little more profit in the years prior to 1994. However by changing tactics I encountered the worst possible out come. I missed the profits and experienced a nearly catastrophic loss in 1994. Had I followed either tactic consistently I would have been much better off.
Needless to say I have reverted to my previous policy of not carrying any open futures positions from the Friday before Christmas until the trading day after NewYears.

I'm not sure how important this rule might be to stock traders but I am inclined to think that the holiday period would be a good time to take a break and relax. Then we can return to the markets refreshed and with a clear head after the beginning of the year. Not only will we have more time to spend with our loved ones over the holidays, we will probably come out dollars ahead over the long run.

Chuck LeBeau is the co-author of Computer Analysis of the Futures Market, and the former co-editor of Technical Traders Bulletin. Chuck is the featured speaker at IITM's upcoming How to Develop a Winning Trading System That Fits You three-day workshop in Phoenix, January 2004. Chuck has 27 years experience in the markets and is widely known for his specialized knowledge of technical analysis. He also develops trading systems and currently runs a website devoted to trading topics; www.traderclub.com. This article is Bulletins #54 from the "forum" section of Chuck's informative site.

Coal in the RIAA's Stocking

According to the U.S. Court of Appeals for the District of Columbia, the Digital Millennium Copyright Act (DMCA) does not authorize the issuance of subpoenas to Internet Service Provider for the purposes of identifying P2P file sharers. The decision is a blow to the Recording Industry Association of America (RIAA), which had mounted a major campaign of lawsuits against individual broadband subscribers who used P2P software to share music files. This tactic was forced by defeats in the RIAA's effort to hold the P2P software companies liable for piracy. Indeed, in a second setback on the same day, the Dutch supreme court (the highest legal body in Europe to yet consider a case on file-sharing software) ruled that the developers of Kazaa software cannot be held liable for how individuals use it.

E-Commerce Law Week summarizes legal and other developments affecting electronic commerce and security with special emphasis on Encryption, Digital Signatures, Computer Security, Privacy, and related issues.
To subscribe to E-Commerce Law Week click hereTo unsubscribe, send the message 'Unsubscribe E-commerce Law Week' to cryptolist@steptoe.com.

Friday, December 19, 2003

WHEN BEING A LAWYER IS A BIRTH DEFECTParents, Check for Warning Signs of Incipient Attorney-itis

BY THE RODENT

When the time comes, most people have the same compelling reason for applying to law school–college is almost over. Heck, what else are you going to do with a degree in sociology?

If you don’t believe me, go ask lawyers you know about why they are lawyers. The most common answer is likely to be, "Because I couldn’t get into medical school, not even one of those in the Caribbean."

Admittedly, there are other types of lawyers out there who had a bit more career direction than the rest of us. They are the born lawyers. The law is their life, and that’s the way they like it.

These individuals are easy to pick out of the crowd. They are the ones who will exclaim that they always wanted to be a lawyer. These are also the ones who always knew there was no other career path for them. They were on their way to court before they saw their first episode of Perry Mason, L.A. Law or The Practice.

Still not sure who I’m talking about? It’s that guy who sat in the front row of your college classes, neatly dressed, hand raised to answer or ask questions. His pastimes include hanging around professors’ offices in hopes of getting a good recommendation for law school and doing legal research on ways to sue Ivy League universities if they dare reject his application for admission.

Many parents are fearful of giving birth to a born lawyer. This is especially true of parents who are themselves attorneys and don’t want their child to grow up to be just like them. It is a true heartbreak when such parents learn during the child’s formative years that they have produced another member of the profession.

If you are concerned about your own children becoming lawyers (as opposed to sociology majors), here are some telltale signs that will give you pause:

Michael Jackson is your child’s favorite entertainer–but only because of all the legal issues.

Your child forces you, the parents, to sign a retainer agreement before the kid will do any chores.

The child drafts a will for Mom and Dad to sign–in crayon.

The child befriends the kids in the class who want to be judges and ambulance drivers when they grow up.

Friday, December 12, 2003

THE (IM)BALANCE OF JUSTICE

Not all lawyers are alike. In fact, individual lawyers need to act differently; they cannot handle every matter in the same manner. Oftentimes, the approach you take and the way you posture are dictated by whom you represent.

Let me qualify what I’m about to write by saying that I am limiting my comments to transactional lawyering. Based on what I know of litigators, their clients are always absolutely guilty or innocent. (At least that’s what I picked up watching the Michael Jackson coverage.) And the lawsuit they are currently working on is always the most open-and-shut—or the most frivolous—of their careers.

Transactional lawyers need to be a bit more adroit when positioning themselves on behalf of their clients. Perhaps the best example of this is when they are called upon to represent either the borrower or the lender in a loan.

Skillfully moving from one side to another requires a split personality. Almost everything about working on this deal is different, depending on what side of the money you find yourself.

1. Billing. Transactions involving the borrowing of money often call for the borrower to pay all legal expenses, including those incurred by the lender. Lawyers must therefore adjust accordingly. If you are representing the borrower, you will record every move you make in 6-minute increments. Your client will then scrutinize your legal bills—which may be cut back to what the client thinks is appropriate. On the lender’s side of things, it’s time for free-form billing. At the closing, you simply write down an amount of money you feel like having, scribble "for legal services rendered" next to it and send in your bill. It’s that easy. Allow 30 days for delivery of your check.

2. Location. Closings for loan transactions are typically held at the office of lender’s counsel. That means home-court advantage. Visitors will be relegated to begging unsympathetic office staff for access to the fax machine, the Internet and the restroom.

3. Attitude. Lawyers tune up or down their attitude depending on who is behind them. With the bank behind you, you can be as demanding and obnoxious as you like. Who’s going to say anything? But you’ll need to lose the attitude if you are at this transaction with hat in hand. It’s a Jekyll and Hyde existence that often confuses those you work with—or live with.

4. Work. Oh yeah, there’s also the work itself. If there is any grunt work to be done on the transaction, you know who is going to do it. Beggars, and beggars’ counsel, can’t be choosers. Forget Jekyll and Hyde. When it comes to putting in the hours and producing the product, it’s more of a master-servant relationship.

5. Negotiations. Lender versus borrower is a total mismatch when it comes to negotiating. If you’re borrower’s counsel and you spot an issue, you can raise it, but what are you going to do if the lawyer on the other side doesn’t see things your way? You’re going to say, "Thank you, sir, may I have another?" Knowing this, lender’s counsel will throw in bogus, unnecessary or totally ridiculous provisions, just because they can.
It’s the most fun you can ever have with your pinstripes on.

All of this can be quite distressing for lawyers on the less desirable side of the deal. But don’t despair! There is a good chance you’ll be on the top side at the next deal. Even better is when that opposing counsel is there on the opposite side from you.

Love And Happiness

Everything really isn't rotten in the media. Sure, there's serial plagiarism, flagrant hypocrisy, fiction pretending to be fact, and all the other sins that keep people like me in business. But there's more to anyone's media life than kvetching and handing out citations. My own is full of excellent moments I generally don't get to mention here, because they haven't made me angry or indignant, aren't linked to Topic A, or, in some cases, aren't even journalism.

I can spend a good hour exploring the mysteries of SkyMall.

Another media year is ending, and it was chock-full of outrages. So I think it's time I came out on my secret joys. Here, in no particular order, is the media stuff that lately gives me pleasure:

2. In-flight magazines. Have I become unspeakably dull, or have these things gotten much better in the last 10 years? I've actually torn out articles to save, and will occasionally take the whole issue home to finish later. And I can spend a good hour exploring the mysteries of SkyMall. My favorite is enRoute, from Air Canada. It's bilingual, it's full of gorgeous graphics, and it tries very hard to be hip, but in a totally inoffensive way. In short, Canada between two covers.

3. Reason magazine. The libertarian monthly. Redesigned under Editor-in-Chief Nick Gillespie and loaded with sharp content. Even manages to make deregulation unboring. The recent 35th anniversary issue named 35 Heroes of Freedom, "people who have made the world groovier and groovier since 1968," including William Burroughs, Barry Goldwater, Madonna, Richard Nixon, and Ted Turner. The same issue called Cindy Skrzycki, The Washington Post's regulatory columnist, "a modern-day Virgil." There is nothing remotely like this magazine. The prospect of a face-off between George W. Bush and Howard Dean -- each libertarian, in a way -- makes me think Reason's big moment could be coming.

4. BOLDFACE NAMES, the gossip/glitterati column by New York Times reporter Joyce Wadler. Runs inside the Metro section in New York, and deep in the A section in the Washington edition, and is always worth the dig. Wadler has created something new: a column that knows how to relish the spectacle of celebrity without joining it, and manages to turn fame into philosophy. Her breathtakingly terse style is built largely on ironic self-abasement -- the worm's-eye view. Nobody in newspaperdom describes the staging of celebrity, or walks the chalk line of meanness, with such finesse. "Diane Keaton... sort of fluttered by," she wrote of one recent movie opening, "like a low-flying Annie Hall balloon in the Macy's Thanksgiving Day Parade, surrounded by handlers."

5. Us Weekly. The magazine that has no distance at all from celebrities. By not pretending to be anything but what it is, a besotted fanzine, Us winds up feeling unconflicted and weirdly honest. Seeing celebrities as they want to be seen, i.e., through the eyes of their publicists, can be more enlightening than seeing them through the eyes of actual journalists. At last, America has something that can stand next to Britain's glorious Hello!

6. Washington Monthly. The little neoliberal magazine that could is back, again. After a long moribund spell, the monthly entered a new age a few years ago under energetic Editor-in-Chief Paul Glastris. Every time you turn around lately, there's another article making trouble in the politico-media sandbox. The current issue has a Grade A filet by Nicholas Confessore, who argues that pundit and author James Glassman is using journalism as a kind of cover to promote the interests of a corporate lobby group. Feels like a glimpse of some dystopian media future, except it's already here.

7. The Week magazine. A sort of ultimate digest of the news. Drawn largely from other media coverage, The Week captures what you somehow missed, from Peruvian politics to all you need to know about that new Al Green album. Fun but never silly. Lots of Delta Shuttle types who abandoned the newsweeklies long ago are having a nice quiet affair with this magazine.

8. Real estate ads. Is it the mortgage-rate boom, the sense that this is where America is making all its money, that's made these so much fun? The best ads are in The New York Times Magazine -- home of the triple-mint 3BR for only $6 million! -- and The Wall Street Journal's Friday weekend section, where you can ogle fantasy houses from Maine to Maui. Not to mention Realtor.com, with those 360-degree virtual tours. Voyeurism has entered a whole new age.

9. TV Land, Nickelodeon's banquet of old TV shows. The best family gathering place on the tube. Turns out you can't predict which shows will hold up. "Get Smart" and "The Flying Nun" have aged like great wines. And the early, black-and-white episodes of "Bewitched," shot through with dark cultural commentary, have transcended mere television and become art. But "The Waltons" and "Mr. Ed"? I'm afraid not. Off you go, to the ash heap of media history. Even in a generous mood, a critic has to have standards.

William Powers is a staff correspondent for National Journal magazine, where "On The Media" appears.

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Thursday, December 11, 2003

Word of the Day for Thursday December 11, 2003
gallimaufry \gal-uh-MAW-free\, noun:
A medley; a hodgepodge.

Today bilingual programs are conducted in a gallimaufry of around 80 tongues, ranging from Spanish to Lithuanian to Micronesian Yapese.
--Ezra Bowen, "For Learning or Ethnic Pride?" Time, July 8, 1985

Then the speech itself, and you have to feel sorry for TQMEM [The Queen's Most Excellent Majesty] having to read out this frightful drivel, this grim gallimaufry of cliches, jargon and outright lies.
--Simon Hoggart, "Grand tradition: Maltravers, Rouge, Garter, Skinner," The Guardian, November 27, 2003

Maran reports the daily jostlings and thrivings in a public school with 3,200 students, 185 teachers, 45 languages, a principal and five vice principals, five safety monitors, 62 sports teams and a gallimaufry of alternative programs, clubs and cliques.
--Colman McCarthy, "A Writer Goes Back to School," Washington Post, August 20, 2001

Gallimaufry, originally meaning "a hash of various kinds of meats," comes from French galimafrée, from Old French, from galer, "to rejoice, to make merry" (source of English gala) + mafrer, "to eat much," from Medieval Dutch maffelen, "to open one's mouth wide."

Monday, December 08, 2003

Time is money

The National Law Journal is just out with its annual survey of law firms' billing rates, and by big-city standards, Philly firms weren't wildly out of line. The top tickets nationally were Miami's Greenberg Traurig and L.A.'s Greenberg Glusker, whose priciest partners each bill $850 an hour. Top rate in Philly was the $645 an hour charged by at least one senior partner at Morgan, Lewis & Bockius. (The paper obtained the rate by scanning bankruptcy court filings.) The only other firm in the paper's vaunted $600 Club was Blank Rome, whose top billing was $600. Ceilings for other local firms: Ballard, Spahr, Andrews & Ingersoll ($575); Duane Morris ($565); Pepper Hamilton ($550); Saul Ewing ($505); and Stradley, Ronon, Stevens & Young and Cozen O'Connor (both $500).

At 15 seconds, the previous paragraph was worth about $2.69 to that Morgan Lewis senior partner. And to think you got the whole paper, plus store coupons, for a buck and a half.
Source:

LLRX Buzz - The Latest on Legal Research By Tara Calishain
April 15, 2002
http://www.llrx.com/buzz/buzz104.htm
---------------------------------------------------------

**Legal Week

Legal Week (http://www.lwk.co.uk/default.asp?p=homepage.asp) is an
online publication from the United Kingdom. The current issue is
featured in the center column following breaking news headlines since
its release date. While article titles are links to full stories, a
brief description follows each title.

**The Lawyer.com

Another source of legal information from the United Kingdom is The
Lawyer.com, at http://www.thelawyer.com/. Tabs across the page top
list the available options for using this site. The first tab, Lawyer
News, starts with news headlines and continues by offering current
news about deals, features, comment and surveys. Comments include
editorials and opinions, while the current survey focuses on the
London legal offices of the top fifty US firms.

**LibraryLaw.com

Mary Minow's portal to Library Law opens like a book at
http://www.librarylaw.com/. The left page bookmarks legal issues while
the right page provides links to legal issues affecting libraries.

**AltaVista Launches AltaVista ParaPhrase, New Crawling Initiative

Seems like the new hot thing is providing suggestions to narrow a
search. Teoma trumpeted that in its new launch and now AltaVista is
touting their beta test of AltaVista Paraphrase. One percent of US-
based visitors to AltaVista.com will get to check out the tool.

Here's how it works. Enter a search query. The results will come with
a light orangish box on top. The box will contain suggestions for
keywords to refine your search. If you've used AlltheWeb.com, you'll
notice that it looks very similar to their Beta FAST Topics.

Research Connect™ is an integrated research database connecting the media and investors with leading independent financial, business, economic, political, technical, legal, medical, scientific, and social research.

The Research Connect database was built with the goal of indexing the vast group of extraordinary minds that are conducting research throughout the world. Research that is free of bias and research that is shaping the world, the economies and the markets we live in.

Research Connect is an invaluable resource for the national media, independent research firms, university professors, students, institutional money managers, investors, public relations firms and countless others.

In January 2004 we will be releasing RC Research Wire. Research Wire is a daily research transcript delivered directly to subscribers of Research Connect. This automatically generated email report summarizes new research and comments that have been added to ResearchConnect.com over the last 24 hours. To view the layout of Research Wire please visit our Press Room.

Thursday, December 04, 2003

Five Steps To Investing Better Than The Pros

"Those investment guys at Citibank don't know anything... they just clock in and clock out, and never actually think for themselves."

This complainer is an Englishman working in Brazil. He's a hardworking entrepreneur, and he was an attendee of an International Institute of Trading Mastery (www.iitm.com) seminar I spoke at last week. This Englishman was at the conference to learn... to become a significantly better trader/investor.

I think he'll become a great investor... he's already following the five basic steps I outline below. And as you'll see, if you follow them as well, you'll not only beat the pros at their own game, you'll become a great investor... just like our English friend.

Why The "Pros" Don't Think For Themselves

The first thing that tipped me off about the Englishman being on the right track was that he'd already made an important discovery: The fact that someone works for a big firm does not mean they actually know anything about making money...

When you work for a big firm, like a Morgan Stanley, the truth is you're not really expected to think for yourself about the big picture. You're simply a cog in the wheel. And so is everybody else. It works... all the cogs rely on each other.

For example, a Morgan Stanley broker's job is not to think about the markets... That's what guys like Barton Biggs and Byron Wien at Morgan Stanley are paid to do.

You're not expected to pick stocks...
That's the research department's job.

You're not expected to fill out account forms and send 'em to the home office...
That's the operations department's job.

And you don't have to keep up with the regulators...
That's the compliance department's job.

Heck, what do you even do?

As a broker, your sole job is to be on the phone talking to clients. That's it. No thinking for yourself please... we have a department for that.

I'm confident that you can beat that guy (and all the rest of those guys) at investing. You've simply got to put it all together... something they're not allowed to do. And I've come up with five things that I believe it takes.

Let me preface this by saying that most people will not have the time nor the desire to go through with this. And let me also say that the five things below are not all earth-shattering... there's no substitute for hard work. But if you've got the time, and you stick to these five things, you can beat practically everyone.

The Five Keys To Beating Everyone At Investing

1) Commitment. I know that Englishman is more committed. He is not clocking in and clocking out. This is the primary thing consuming his brain. He'll be able to beat the guys who aren't expected to think in no time. Among two roughly equally skilled competitors, the one with deeper commitment usually wins.

2) Homework. You need to know more than the other guy - your competition. This means educating yourself (reading) and crunching numbers yourself. I recommend some resources to get educated at the bottom of this email.

3) Experience. Unless you're Tiger Woods, even with all the skills and commitment, you're not going to win big your first year. But at first, you at least need to be in the game. All the reading about golf in the world isn't going to make you a good golfer if you're not on the course. Keep paying your dues (by investing), take personal responsibility for your losses and try to learn from them, and the big profits will come.

4) Thinking for yourself. Along my investment education I've been amazed to find that there are only a couple of folks out there that think for themselves. These names include Jim Rogers, Bill Gross and Warren Buffett. But it is an amazingly short list. Remember, the employees of a brokerage firm are not paid to think for themselves. So you'll be able to beat the brokerage firms in no time. If you're simply copying their advice, you'll never beat 'em.

5) Avoiding major mistakes. The "catastrophic loss" is what kills you. You can't afford to lose it all. Cut your losses early. Use trailing stops. Do whatever it takes to keep your downside limited and your upside unlimited. Pretty soon, one day, that unlimited upside will show up in your account.

There are ways to do okay in 30 minutes a year. There are ways to do well in 30 minutes week. But I'm not talking about those ways. I'm talking about becoming a superstar - the best full-time investor/trader possible.

Bonus: Two More Ways To Become A Better Investor

In addition to the FIVE steps above, two great things you can do to become a smarter, wealthier investor are:

1) Learn how the great, individualist investors got great, and how they think...

Jim Rogers: Read the book Adventure Capitalist by Jim Rogers (you can learn more about Jim at www.JimRogers.com).

Bill Gross: Read his monthly commentaries at the www.PIMCO.com website and learn what he's talking about.

Warren Buffett: Read and try to understand what Warren Buffett is talking about at: www.berkshirehathaway.com.

2) Learn to do great homework.

Two books of great homework are: The Research Driven Investor by Tim Hayes and Winning on Wall Street by Martin Zweig.

A few great books with great thinkers include all of the Market Wizards books by Jack Schwager (particularly the first one), and the work done by the folks at the International Institute of Trading Mastery (www.iitm.com)

This e-Letter is often filled with tips and tricks - shortcuts to making you a better investor - a successful investor. But to truly be great, you can't get around the work. Today is not about tricks or shortcuts.

Along the way you may just find, like I have, that the learning and getting better at something is a lot of fun. You may even come to see investing as I do, more as an all-consuming game with a scoreboard, rather than work. And there is a scoreboard: It's your monthly account statement.

If you want to be great, and you've got the time and the inclination, I've given you the five keys to beating everyone, and a pile of books to get you started in the right direction... so get to it!

The holidays are here, which means you should have some extra reading time to get started. There is no downside to heading down this path... even if you can't give it the full commitment, you'll be a much better investor than you ever were. And that's worth it.

If you're interested in buying any of the books that I mentioned in this e-letter, you can find them on the "Recommended Reading" page of our web site at http://www. InvestmentU.com

Steve Sjuggerud, has a doctorate in finance and has been regarded as one of the best researchers on the stock market around. He is the editor of "Steve Sjuggerud's True Wealth," has been a member of the Oxford Club's Investment Advisory Panel for more than five years and is the co-founder and President of Investment U. Steve is a featured speaker at the IITM/Investment U Stock Mastery 101 Course, December 6-7.

Article # 293 reprinted with permission from The Investment U E-Letter. For a free offer and to learn more about Investment U and Steve Sjuggerud, visit their website http://www.investmentu.com/IITM. Learn how in just 20 minutes a week you can become more market savvy than 99% of investors

"The way to develop self-confidence is to do the thing you fear and get a record of successful experiences behind you. Destiny is not a matter of chance, it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved." ~William Jennings Bryant

Our exploration of the subject of "trading expertise" is in its fifth week For the last four weeks, we've been discussing the concept of expertise as applied to a price discipline in trading. Last week we looked at the importance of practice in your journey toward developing expertise in your chosen price discipline. I left you with the thought that one has to develop a way to practice. I mentioned that when many folks think of "practice trading" they immediately think of "paper trading".

Paper trading involves writing your trades down on paper, but not actually placing the trade in the market. For me and many of the traders that I work with, paper trading is seen as a tool with very limited usefulness. The shortcomings of paper trading are many, but the bottom line is that nearly everyone paper trades well. As one friend says, I've known many paper trading "millionaires" who found a different reality when they put real money into the markets. While execution issues such as commission costs and slippage play a role in differentiating paper trading from real trading, the true distinction comes in the trader's psychology. There's a very real difference between a big profit or loss on paper and that same amount when seen in real dollars.

To illustrate this difference, think about placing a 2" x 4" board on your living room floor. Your goal is to walk across that board without falling off. It's a piece of cake, actually. After successfully traversing it once, you run, skip or dance across. "Pass the blindfold, this is easy!" might be your next statement. Now imagine that same narrow board stretched between the roofs of two buildings - 20 stories above the street. Crossing that very same board takes on a whole new level of complexity. The risk is infinitely higher. It's the difference between a little personal embarrassment (if you step off onto your living room floor) and serious personal injury (or worse) if you fall 20 stories. That gives you an idea about the magnitude of difference between paper trading and real trading. But don't despair! There are some great methods for practicing your price discipline that will not put you or your cash (at least not much of it) in harms way. We'll explore those methods in next week's "Trading Tip".

D. R. Barton, Jr. is a featured speaker at the upcoming Stock Mastery 101.

D. R. Barton, Jr. is a lead instructor for IITM courses. He is the Chief Operating Officer and Risk Manager for the Directional Research and Trading hedge fund group. D. R. has been actively involved in trading, researching and teaching in the markets since 1986. In 1999. D. R. has created extensive and innovative new training products and taught extensively in many investment areas including intra-day trading, swing trading, and cutting edge risk management techniques.

His writing credits include: Safe Strategies for Financial Freedom by Van K. Tharp, D. R. Barton, Jr. and Steve Sjuggerud and cover articles for the trade newsletter Market Mastery where he also serves on the editorial advisory board. In addition, D. R. writes a stock screening newsletter for traders and investors called The 10-Minute Trader.